SPRING VALLEY — Down the road from the site of a bogus real estate development tied to a scandal that’s enveloped the village’s top two politicians, construction began recently on a separate revitalization project backed by the same officials.

Workers broke ground in the winter on a 38,000-square-foot commercial building at Church and Main streets that developer Larry Weinstein hopes will be done by June 2014.

Post Office Square, as it’s called, will replace an old municipal parking lot with a three-story commercial building. Retail space will front Main Street, and office space above could house lawyers, doctors and insurance agents. A new, 26-spot parking lot will face North Madison Avenue, directly across from the village post office.

The project is expected to cost about $3.5 million, which he is financing privately, Weinstein said.

Weinstein, 54, has developed other properties in Spring Valley and the region. The Airmont resident has sought elected offices, including village trustee and Rockland County legislator.

The village Board of Trustees voted 3-1 to approve the Post Office Square project during a Feb. 28, 2012, meeting. Mayor Noramie Jasmin and her deputy, Joseph Desmaret, supported it in addition to Trustee Anthony Leon; Trustee Demeza Delhomme voted “no,” and Joseph Gross was absent, minutes of the meeting indicate.

Scandal at other site

As bulldozers rip up the old parking lot and foundation walls are erected at the site, federal investigators are pursuing criminal charges against Jasmin and Desmaret related to alleged involvement in a statewide corruption plot that erupted last week.

A federal probe resulted in the arrests of Desmaret and Jasmin, both Democrats. They were charged with mail fraud in a sting that named four other politicians, including state Sen. Malcolm Smith, a Democrat. Smith is accused of arranging bribes so he could run as a Republican in the New York City mayor’s race.

Authorities say the Spring Valley officials agreed to push through the construction of a catering hall-community center in the village in exchange for a financial stake in the project, in Jasmin’s case, or cash, in Desmaret’s case. They are accused of holding secret meetings with local developer Moses “Mark” Stern, who was cooperating with the FBI, to discuss how Stern would sell the development to the village board and what the payoff to the two officials would be.

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Desmaret is alleged to have taken cash from Stern on Feb. 28, 2012, the same day the board voted on Post Office Square, according to the federal complaint.

The development, on a 2- to 3-acre parcel near Village Hall, was originally planned as an indoor recreation facility where the village’s youth could congregate.

Like the recreation facility, Post Office Square was envisioned as part of the village’s downtown revitalization plan during the term of former Mayor George Darden, Jasmin’s mentor and predecessor, who retired in 2009.

Both projects have evolved since Jasmin became mayor. Darden said at one point that he had anticipated Post Office Square as the site of an amphitheater with a fountain and green space.

“But I see that all of that has changed,” he said. “So what it’s changed to I had no input in. That was done with the present board.”

Jasmin could not be reached for comment for this article; a message left at her office wasn’t returned, and her cellphone voicemail was full.

Jasmin’s name is prominently displayed on a sign at Post Office Square on Main Street, as it was on a sign promoting the catering hall-community center down the road. Officials took that sign down last week.

Square to be anchor

Standing at the Post Office Square site this week, Weinstein said though he’s been “cross-examined” by people on the street in recent days, he’s not worried about the scandal affecting his plans.

“It’s going to be the anchor of the village. I think that it’s a plus for the village,” he said.

Weinstein hopes to attract a big-name business tenant to the upper floors. He envisions a central location where residents can walk from their homes or the nearby train station for services and shopping.

Complicated deal

A 2009 agreement signed by Darden and Weinstein lets the developer take over the 0.63-acre site in exchange for remaking a blighted parking lot nearby on Commerce Street. The deal would give back residents roughly 60 parking spots, replacing 60 that were eliminated by Weinstein’s project.

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After struggling to amend the terms of the deal with the village board, Weinstein said, he agreed to spend $250,000 to redo the lot over the summer. The lot was owned by the U.S. Postal Service, and to complete the arrangement, the village bought the parcel for $280,000.

Complicating the building process is that part of the site was contaminated years ago when a fire broke out at a former building, Weinstein said. Department of Environmental Conservation spokeswoman Wendy Rosenbach said the agency is working with the developer to determine the nature and extent of the contaminant and figure out how it will be cleaned up, indicating that the remediation hasn’t been completed. The spill was originally reported to the agency in June 2009.

Weinstein said he had the area cleaned and tested, and he’s now waiting for notice from the agency that it will be removed from its spill site list. The DEC’s go-ahead will let him move forward with laying the foundation, he said.

Under his agreement with the village, Weinstein is entitled to reimbursement of up to $100,000 for cleanup costs. Weinstein’s lawyer, David Ascher, said remediation likely would cost more than that.

A board divided

While Jasmin has called Weinstein’s project “way overdue,” other trustees had mixed feelings.

In late 2011, shortly before the board approved the deal, Desmaret urged caution before moving forward without knowing details of the plan hashed out by the previous mayor. Desmaret declined to talk about the project, and Leon could not be reached Thursday for comment.

Delhomme, the only board member to vote against the project, said this week that he disagreed with giving a private developer money for cleaning up the site.

“If the village is going to do it for the public … then it’s OK for us to spend the money for the people,” Delhomme said. “No developer should expect me to take the taxpayer dollars and give them as an incentive.”

Weinstein noted that new stores in his building would boost sales-tax revenue to the village.

“It was a parking lot for so many years. It’s going to be a big change,” and not everyone adapts well to change, he said.